Thursday 29 September 2016

First-time buyers' tax relief scheme is labelled a 'flop'

Published 09/07/2015 | 02:30

Fianna Fail's Michael McGrath: 'It is now clear that the scheme to provide relief from DIRT for first-time buyers has been nothing short of a flop'
Fianna Fail's Michael McGrath: 'It is now clear that the scheme to provide relief from DIRT for first-time buyers has been nothing short of a flop'

A tiny number of home-buyers have benefited from a scheme to give them relief from paying DIRT tax when saving for a deposit to buy a home.

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Just 43 tax refunds have been issued to first-time buyers who qualified for the scheme, the Irish Independent has learned.

When he announced the scheme in last year's Budget, Finance Minister Michael Noonan said he expected 9,500 home-buyers to benefit from it over the course of this year.

But Fianna Fáil finance spokesman Michael McGrath, who obtained the information about the low take-up of the scheme, said the initiative was a flop. Under the scheme first-time buyers get a refund on deposit interest retention tax (DIRT) on savings being used to build up a deposit to buy a home.

They have to pay the tax first and then seek a refund. The refunds apply until the end of 2017.

The relief can apply for four years before a property is bought by new buyers.

But Mr McGrath said: "It is now clear that the scheme to provide relief from DIRT for first-time buyers has been nothing short of a flop."

He said that it emerged from previous Dáil questions that the average repayment is expected to be just €294 for each new buyer.

Mr McGrath said exorbitant mortgage interest rates, the abolition of mortgage interest relief and the new Central Bank rules on deposits have combined to make home ownership increasing unaffordable for young people.

Irish Independent

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